Archive for January 2014

It seems that this is really a seller’s market except for the stringent requirement to qualify for a mortgage and these seem to be getting a little bit more borrower friendly. For a more detailed look at this subject – please read the article below.

Mortgage rates may be rising, but the housing market doesn’t seem to mind. In fact, several indicators have improved alongside rising rates, according to the HousingPulse Tracking Survey released by Campbell Surveys and Inside Mortgage Finance this week.

The lending atmosphere is becoming friendlier, especially to first-time buyers. Simultaneously, the average time on market for non-distressed properties and the average sales-to-list price ratio both improved year-over-year in December, according to the survey.

“Six months after the May-June 2013 rise in interest rates, the housing market is showing remarkable resilience,” said HousingPulse research director Thomas Popik.

“[U]nderwriting standards are getting a little looser” at Fannie Mae and Freddie Mac, as well, according to Campbell and Inside Mortgage Finance.

The average credit score for GSE loans in the fourth quarter was 743, down from 758 a year earlier. Loan-to-value ratios at the GSEs rose from 75 percent to 76 percent year-over-year in the fourth quarter.

Fannie Mae and Freddie Mac increased their share of the purchase market as well as their share of the first-time homebuyer sector. In fact, the GSEs posted survey highs in both categories, according to the four-year HousingPulse survey. The GSEs accounted to 19.2 percent of purchase loans originated over the last three months of 2013, up from 16.5 percent a year earlier. The GSEs’ share of the first-time buyer market reached 19.5 percent, up from 14.1 percent a year earlier.

A tapering off of rapid growth in home prices would be good news for the housing market. The last year approached the “Bubble” growth rates of the pre-bust market. For a more detailed look at this subject – please read the article below.

While the housing market is still far from “normal,” it is inching that way, according to a report released Thursday from Zillow. Last year’s skyrocketing home price appreciation, frenzied demand from investors, and high tide of negative equity are all expected to subside somewhat this year, according to the real estate company.

Nationally, home prices increased 6.4 percent year-over-year in the fourth quarter, but annual price gains are expected to fall to 4.8 percent by the end of this year.

On a quarterly basis, prices rose 1.4 percent in the fourth quarter, according to Zillow.

“Below the surface of last year’s market, a number of unsettling trends started to emerge as a result of rapid and ultimately unsustainable appreciation, setting up a bit of a mixed bag for 2014,” said Stan Humphries, chief economist at Zillow.

However, some of the markets that posted the highest price gains last year are already slowing, which according to Zillow, is “a welcome sign in markets that risk crossing over into bubble territory as rising mortgage interest rates create affordability issues for homebuyers.”

Markets such as those in California and the Southwest that experienced rapid appreciation this year may stall this year due to affordability issues, leading to “volatility that could potentially cause whiplash for homebuyers and sellers,” according to Zillow.

Nationally, price appreciation is already tapering off, according to Zillow. After reaching a high of a 7.1 percent annual price gain in August, price gains remained below 7 percent for the entire fourth quarter.

Nobody is really sticking their nose out too far in this article. Slow growth with not much action in the younger segment of buyers is just about what is to be expected. For a more detailed look at this subject – please read the article below.

Unemployment dipped to 6.7 percent nationally in December, and the Federal Reserve is expecting that figure to drop below 6.5 percent later this year. If the Fed is right, it will be the first time since the Great Recession began in 2008 that unemployment will be so low.

What this spells for the housing market is greater buying power and an upswing in new-home construction, according to Ilyce Glink, managing editor of the Equifax Finance Blog. “The housing market may not return to its pre-recession ‘normal’ in 2014 or even 2015,” Glink said, “but with more Americans employed and able to buy homes, we should see the real estate market, especially new construction housing, continue to pick up steam.”

This rise in the number of employed Americans dovetails with expected growth in the U.S. economy. Frank Nothaft, chief economist at Freddie Mac, says the economy should increase by 2.5 percent to 3 percent in 2014, which should empower more Americans to buy homes.

Experts feel this double-edged uptick will be enough to overcome a 3.7 percent increase in home sale prices nationally (as predicted by the National Association of Realtors) and an increase in mortgage interest rates.

It seems that 2013 was really a seller’s market except for the stringent requirement to qualify for a mortgage. Most Mortgage Brokers think that the lenders are taking advantage for this increase in sales to demand that buyers are “Over Qualified” before they will grant a mortgage. For a more detailed look at this subject – please read the article below.

Existing-home sales finished 2013 with a slight increase, closing the book on the strongest year for sales since 2006, the National Association of Realtors (NAR) reported Thursday.

Total existing-home sales–including all completed transactions of single-family homes, townhomes, condominiums, and co-ops–increased 1.0 percent month-over-month to a seasonally adjusted annualized rate of 4.87 million last month. November’s sales rate was revised down to 4.82 million.

December’s sales were down year-over-year, coming up 0.6 percent short of December 2012’s pace of 4.90 million.

Removing all other types of sales, sales of existing single-family homes rose 1.9 percent from November to an adjusted annual rate of 4.30 million. Compared to the prior year, single-family sales were down 0.7 percent.

For all of last year, NAR estimates there were 5.09 million existing-home sales, a 9.1 percent improvement from 2012.

“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” said NAR chief economist Lawrence Yun. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”

This article brings to light some points to think about regarding how real estate transactions are carried out. If you’re an agent you might want to compare how you treat your clients with this presentation. For a more detailed look at this subject – please read the article below.

As analysts continue to watch market indicators for trends that might hamper the borrowing experience, a recent poll shows that borrowers themselves are more focused on customer service problems.

The poll, conducted by real estate search engine Qazzoo.com, asked new homebuyers which aspect of the experience they found the most frustrating. Available answers covered the entire purchase timeline, starting with reaching out to a real estate agent and concluding with the loan application process.

According to the company, the most common source of aggravation cited by respondents was “lack of timely follow up by the real estate agent,” an answer that garnered 42 percent of responses.

The next most popular answer was also service-related: “being shown homes that don’t meet your needs” (36 percent).

The other three options, all market-related, came up in fewer responses, with 11 percent of consumers complaining about a “lack of real estate inventory,” 5 percent citing problems “understanding the mortgage options available,” and 4 percent pointing to “difficulty in qualifying for a mortgage.”

Two percent of consumers responded with issues falling into the “other” category.

Michael Urbanski, CEO of Qazzoo.com, said the idea behind the survey choices was to “illustrate what can and cannot be controlled by the real estate professional.” For example, while interest rates and loan programs are beyond an agent’s control, timely follow up is not.

This is a great example of politicians trying to write rules for the private sector with very little practical experience in the field that they are trying to regulate. Good intentions do not always translate into good laws. For a more detailed look at this subject – please read the article below.

According to the Consumer Financial Protection Bureau (CFPB), the new lending rules that went into effect on January 10 are meant to take a back-to-basics approach to mortgage lending and lower the risk of default and foreclosure among borrowers. However, many industry veterans feel that the rules may hurt those they are designed to protect, primarily low income borrowers.

On January 14, Congress’ House Financial Services Committee held a conference to discuss how homeowners may be harmed by the new CFPB rulings. Speakers said low-to-moderate income borrowers stand to lose the most if lenders cannot write loans outside of the Qualified Mortgage (QM) guidelines.

“In rural areas, it is crucial to tailor mortgages to fit borrowers’ needs and risk profiles,” one lawmaker noted. Another lawmaker who represents a state where 50 percent of the homes consist of manufactured housing said most of the housing loans in his state will not meet QM standards.

Speaking on “Mortgage Markets Today,” Chris Whalen, EVP and managing director for Carrington Holding Company, discussed the pitfalls in the new regulations with Louis Amaya, host of the Five Star Internet radio show and CEO of iServe Companies.

“I think these concerns are well founded,” Whalen said. “Under the new CFPB rules, about half the prospective homeowners in this country can’t get a mortgage from a bank because the new laws have greatly restricted credit access.”

This is good and bad news for the country. With Mr. Watt running the FHFA you can expect more principle forgiveness with more buyers qualifying for mortgages. On the down side his programs will cost the U.S. Taxpayer a lot more money in the form of government subsidies (HAPM, HARP, Etc.). For a more detailed look at this subject – please read the article below.

After months of contentious debate, the Federal Housing Finance Agency (FHFA) finally has a new director. Mel Watt, the former democratic North Carolina senator, was sworn in Monday to a five-year term as the first Senate-confirmed director of the FHFA. Anthony Foxx, the U.S. Secretary of Transportation and former mayor of Charlotte, North Carolina administered the oath.

FHFA was created by the Housing and Economic Recovery Act of 2008 to oversee Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks and is responsible for oversight of the $5.5 trillion mortgage finance market.

“I am honored to serve as director of the Federal Housing Finance Agency,” Watt said. “Today’s housing finance system is one of the keys to our economic recovery and I am grateful for the opportunity to help develop a strong foundation for moving this system forward for the benefit of all Americans at this critical point in our nation’s history.”

Watt, 68, represented the 12th congressional district of North Carolina as a member of the U.S. House of Representatives for more than 21 years, being first elected to that office in 1992. As a member of Congress, Watt served on the House Financial Services Committee, and its Capital Markets Subcommittee and Government Sponsored Enterprises. Watt also served on the House Judiciary Committee, where he was ranking member of the Intellectual Property, Competition, and the Internet Subcommittee. Watt also served as Chairman of the Congressional Black Caucus.

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